Which of the below statements is TRUE?

Question

Quizplus · Accepted Answer

In a reorganization, a committee representing the various claimholders is appointed with the purpose of formulating a plan of reorganization. The absolute priority principle may not always be followed in a reorganization, as it can be overruled by other factors such as economic considerations and market conditions. Creditors may not receive distributions based on the absolute priority rule in a merger, as the distribution of assets may be determined by the terms of the merger agreement rather than the absolute priority rule.

Which of the Below Statements Is TRUE